Dambisa Moyo

If left unchecked, the frenzy of leverage and mobile-trading apps could destabilize the U. S. economy and set the stage for a global financial crisis.

ISK IS STEADILY BUILDING ACROSS THE FINANCIAL SYSTEM, fueled by individual investors adopting increasingly speculative, short-term, and risk-heavy trading strategies.

While many business leaders recognize the buildup, they may not fully appreciate its scale and potential consequences. Crucially, the risks are not limited to financial markets; rampant speculation also threatens the stability of household finances and, ultimately, the broader economy.

The danger has become acute, because risk-taking is set to intensify. Digital platforms and mobile apps have made trading effortless, drawing in a surge of new retail participants. More recently, U. S. President Donald Trump signed an executive order allowing 401( k) pension plans to invest in alternative assets such as private equity, private debt, infrastructure, real estate, commodities, and cryptocurrencies. Traditionally reserved for institution- al and professional investors, these assets are typically illiquid and carry risks that most retail traders are simply not equipped to manage.

Compounding the problem, baby boomers are projected to pass an estimated $ 124 trillion to younger generations by 2048. This enormous wealth transfer is already empowering a cohort of retail investors with a strong appetite for equities, cryptocurrencies, and meme stocks and coins, as well as for sports betting and prediction markets.

At the same time, the new generation of

14 | FINANCIAL ADVISOR MAGAZINE | NOVEMBER 2025 WWW. FA-MAG. COM